City Council, Broadmoor at odds over funding decisions

154101065Here’s a sentence I never thought I’d write: A majority of the Colorado Springs City Council members are aggressively anti-business.

That’s the only conclusion you can draw from Tuesday’s council meeting. Thanks to the Feckless Five (Council President Keith King and Councilors Helen Collins, Don Knight, Joel Miller and Andy Pico), Council stripped away funding from both the Colorado Springs Regional Business Alliance and the Colorado Springs Convention and Visitors Bureau. Council withheld half of the 66 percent share of the Lodging and Automobile Rental Tax (LART) that has been traditionally allocated to the city’s destination marketing organization (DMO). Instead of $2.6 million, the CVB apparently will have to make do with $1.3 million.

Similarly, the Regional Business Alliance lost all of its $240,000 in funding from Colorado Springs Utilities, as well as half of the $70,000 allocated from LART.

Not content with infuriating the business community, Council then turned its wrath upon the do-gooders of the nonprofit world. Believing that beleaguered ratepayers shouldn’t be asked to support CSU’s community investment fund, Council directed that the municipally owned company terminate the program. Too bad for the dozens of charitable and nonprofit organizations that have benefited from CSU’s support – and goodbye to the notion that a billion-dollar corporation, whether publicly or privately owned, ought to give back to the larger community.

Council made some vague promises to re-examine funding for the CVB and the Business Alliance, but representatives of the two organizations were angry and dismayed.

CVB board chair Alicia McConnell, also a U.S. Olympic Committee executive, didn’t mince words.

”High unemployment of 8.2 percent continues to plague Colorado Springs,” she said in an email Wednesday morning. “After 18 months of devastating fires and floods to our City and region, accompanied by sensational headlines seen around the world, it is unconscionable for City Council to cut funding to the one organization that businesses depend on to bring tourists to the area. Business owners and their employees that depend on tourists to support their livelihoods will feel the consequences of City Council’s vote yesterday to slash CVB funding for 2014 by $1.3M.

“I and the members of the CVB Board of Directors urge City Council to do the right thing for the Colorado Springs economy and adopt the recommendation from their own citizen-led LART advisory committee to fully fund the Convention & Visitors Bureau for 2014. Jobs depend on it.”

Other business leaders were just as upset. Broadmoor CEO Steve Bartolin made his position clear in a devastating exchange of emails with Keith King and other members of the council majority.

Bartolin said in a message to Council: “I am not aware of any collective experience any of you have in this field,” calling Council’s decision “incredibly unwise.” He accused Council of “jeopardizing the overall tourism marketing effort for the Pikes Peak Region (and) having an effect on our business and every hotel, motel, attraction and restaurant in our town.”

Bartolin also called into question Council’s grasp of the issues, and apparent unfamiliarity with the facts.

Here’s the exchange, beginning with the text of a letter Bartolin sent to King and other members of Council on Nov. 26.

“Our Vice President of Marketing and our Director of Sales attended yesterday’s Council meeting during the discussion on the CVB budget.

“I would like to provide you with input and make four important points.

“1. Tourism marketing is vitally important for our business and the overall economy of the Pikes Peak region. We all saw firsthand what happened when the State of Colorado drastically reduced tourism promotion. It was not a good outcome and it took years to rebound once promotions began again.

“2. Professional tourism and convention marketing are not for amateurs. Like any business, you have to really understand the industry and its nuances. Doug Price was a Senior Sales and Marketing Executive on a corporate level with Marriott Corporation for many years. Thereafter he headed the National Association that other CEOs of Convention and Visitor Bureaus belong to. He knows what he is doing.

“3. I understand it was brought up about outsourcing the CVB. This is precisely what you are doing by having a CVB. As far as having the services the CVB provides bid out, this is not like hiring an advertising agency. They provide a much more comprehensive sales and marketing strategy for both tourism promotion and meeting and convention industry sales. If this were a good idea I think you could find at least one other city in America that does it that way and I don’t believe you will.

“4. Since it is our industry that is being taxed and, in our case, The Broadmoor is accountable for 1/3 of the entire tax, our input should count for something. My suggestion is, leave this to the professionals and make sure they are fully funded and have the tools and resources to do their job.

“Thank you.

“Sincerely,

“Stephen Bartolin, Jr.

“President and CEO”

And here’s King’s response, written Tuesday evening after Council’s decision to defund the CVB.

“Steve, thanks for the letter.  We passed the LART budget at the 50 percent level and decided to leave the rest to the LART committee for recommendations.  We are very concerned about the effectiveness of the program and how it is increasing tourism and economic development.  We are committed to both and that is why we are taking a serious look at it.  I know you have a very effective marketing strategy, and also have an employee on the LART committee.  I think it would be great if the Broadmoor would evaluate the media buys and compare that to what you believe is effective for the city.  Keith”

And here’s Bartolin’s quick response.

“Keith,  I am confused. You said you are returning the remainder of the budget over to the LART Committee. The LART Committee has already reviewed their budget and recommended full funding. Despite two fires and a flood, tourism is the one thing that has remained stable.  What a terrible disappointment.  By the way, our VP of Marketing, Dennis Lesko, chairs the CVB Marketing Committee and has reviewed and approved their media buys.  I will draft a more comprehensive letter to you and your fellow Council members.”

And here’s Bartolin’s  “more comprehensive” letter.

“I received the attached email from Council President, Keith King, thanking me for my letter and recommendations and then advising me that you decided to cut 50% of the CVB budget ($1.3M) leaving the rest to the LART Committee for recommendations.  He further expressed your concern over the “effectiveness of the program.”  I am not aware of any collective experience any of you have in this field.

“First of all, the LART Committee has already reviewed the CVB budget and recommended full funding.  Can anyone explain to me why then it would be turned over to them for recommendations?

“Secondly, President King suggested since we have a BROADMOOR staff member on the CVB Board that they review the media buys.  That happens to be our Vice President of Marketing, Dennis Lesko, who chairs the CVB’s marketing committee and has already reviewed and approved the media buys.

“What you have done has repercussions that clearly you have not considered.  You have jeopardized the CVB’s relationship with their ad agency since it leaves them uncertain about funding.  You have jeopardized key staff members at the CVB in terms of wondering about their job security since you cut the funding in half.  You have jeopardized their marketing strategy since they have to begin making media buys now and you have jeopardized the overall tourism marketing effort for the Pikes Peak Region having an effect on our business and every hotel, motel, attraction and restaurant in our town.

“We have been through two major fires and a flood, and tourism is the one thing that has held up in our economy.  This is an incredibly unwise decision on the part of our City Council, who represents our community and those in one of our most valuable industries, tourism. The CVB’s mission is to bring more visitors to the Pikes Peak Region, therefore they support the City of Champions proposal.  I would think you could disagree on that issue and let’s put the good of the community first, and not damage the entire tourism marketing for our City.”

It’ll be interesting to see what King does now. Will he cave right away, try to save face by stalling until after the New Year, or stick to his guns? It’s not often that you see elected officials kick sand in the faces of their most powerful supporters a few months after being elected, but that’s exactly what’s happening.

It’s hard to imagine that the business community will sit passively by until April 2017, and let Council’s majority gum up the works.

If King doesn’t change his ways, they’ll either have to live with him and his myrmidons until 2017, or go for the nuclear option: recall. It’s a grim prospect but, as three Democratic state senators in Colorado have learned to their sorrow, an effective tool for change.

Imagine a well-financed effort to oust King, who received far less than a majority of votes cast in his district. Potential recall supporters might find it easy to recruit an attractive alternative, and equally easy to paint King as a business-unfriendly eccentric, interested in power for power’s sake.

We live, it seems, in interesting times.

 

18 Responses to City Council, Broadmoor at odds over funding decisions

  1. There appear to be valid points to each position.
    The need to totally support tourism and the military is essential.
    It is all that supports the local economy with great aid from the small local business sector which is significant and vital.

    The region cannot attract major new employers.

    There is no point in continuing to fund a feckless RBA that has not brought business to the region and created ill-will with many within the small business community.

    Is now the time to consider splitting the RBA back into separate chamber and recruitment organizations with separate staff? Allow the current RBA to do the banquet thing and bring in outside professionals with a track-record to set up a whole new ED effort?

    If you have thoughts on the viability, or lack thereof, we would appreciate comments – If I am not mistaken, a wise and knowledgeable council member stated:

    “We’ve absolutely talked this to death.”

    Rick Wehner
    November 27, 2013 at 2:30 pm

  2. I believe the Council members are standing up for the taxpayers and ratepayers. Who decided that my taxes should go to any non-profit? If I want to contribute to a non-profit I will do so directly. Perhaps Colorado Springs would be more business friendly if they stopped confusing non-profits with for profit businesses and focused on supporting the latter.

    Linda Sommer
    November 27, 2013 at 4:35 pm

  3. Wow! Hard to comprehend. There is so much hard data available that demonstrates that tourism promotion through a dedicated revenue stream such as LART returns multiple times the amount spent within a year. A Lodger’s tax is used by virtually every city of any size to promote tourism and convention traffic.

    I did not think it could get any worse than the last council. Council needs to hear from other tourism entities. The Broadmoor is unique. It is the largest property and highest price property in town and does pay a lot into the LART. It also has its own fee that it charges guests to help with its promotion, as I understand. Please correct me if I am incorrect.

    That is important because if the Broadmoor is hurt by this, imagine the damage being done to other properties by this hasty and ill-conceived idea.

    As for the RBA dues and the charitable component – I can’t even begin to touch that one.

    Please restore some form of sanity, even if we have to go to the ballot box.

    Rob
    November 27, 2013 at 6:05 pm

  4. Ladies & Gentlemen,,,,,Many many many years ago, in the late 1970′s, it was our local holel industry that went in front of the then city council to ask the council for permission to impose a local lodging tax on their guest for the purpose of promoting the destination to a National audience. This request was prompted in part due to a National gasoline shortage that temporarily curtailed the drive market. Promoting a destination is not done by lay person’s but by a professional staff at the Convention and Visitors Buereau who know how to responsbly spend this lodging tax dollars with a maximun return. Nothing is done haphazardly but always with a methodical purpose and outcome. Let me assure you that removing funds from the CVB is as dangerous as a Military guard falling asleep at his post in a combat environment. Time to wake up folks.

    Terry Sullivan ,President & CEO, Colorado Springs CVB, 1990-2010
    November 27, 2013 at 8:59 pm

  5. Good job. Keep it up the cuts. Whiners quit whining about not being able to throw other peoples (tax payers) money around. If the tourist industry wants to advertise, they can do it with they’re own collective efforts privately, with their own profits. Utility company’s forced to raise rates to run a philanthropic efforts is stupid if you think about it for 5 seconds. I’ll buy cheaper power given the choice, and be in a personal position to help as I see help needed and as I see it deserved. Its my money, my choice. I bet most people feel that way.

    Jon
    November 27, 2013 at 11:28 pm

  6. …….. and folks thought we had a disfunctional council in the LAST decade ….. what ARE these prople thinkin’ ?

    richard black
    November 28, 2013 at 5:37 am

  7. Another example of our elected officials: “The incompetent, leading the unwilling, to do the impossible.”

    Robert Levy
    November 28, 2013 at 2:55 pm

  8. I suggest you read Colorado Revised Statutes, Article 11, Section 2.

    “Neither the state, nor any county, city, town, township, or school district shall make any donation or grant to, or in aid of, or become a subscriber to, or shareholder in any corporation or company or a joint owner with any person, company, or corporation, public or private, in or out of the state…”

    This is interpreted to say a town can’t donate to the Boy Scouts or even right of way for a road to the County without receiving fair value. Regardless how desirable a contribution may be morally, it is not legal. Perhaps CS residents should be beating up on the previous board for violating the law.

    Merlin Klotz
    November 28, 2013 at 5:01 pm

  9. This is total bullshit! Here we go again, non-producers making decisions for producers!

    Patrick Bollar
    November 29, 2013 at 9:27 am

  10. This article is crap. City Council needs to keep asserting authority in being accountable of tax payers money and stop all the cronyism in this two bit town. The City is applying for a state grant to increase tourism to Colorado Springs and is confident they’ll get it, so there’s money for tourism. The Regional Business Alliance should get their money from businesses not the City or CSU. Why was it alright when BAch lowered the donation to RBA from 250,000 to 75,000 and no one batted an eye? Because they knew the chumps at CSU would continue to pay them a quarter of a million dollars thats why. Not all CSU customers are City residents so they dont care about COS tourism or economic development. If the City Committee is saying the City will still go broke, then why are all these high salaries for City staff offered? Why is the City paying for so many consultants and outside legal recommendations?

    Dale Heeven Jr.
    December 2, 2013 at 9:54 am

  11. What is the total in salaries, count of employees, and amount in benefit packages paid to the CVB and the RBA employees? I bet a hell of a lot more than all the writers at the CSBJ and Independent combined?

    Dale Heeven Jr.
    December 2, 2013 at 9:58 am

  12. Jon and Dale – the CVB is NOT funded by taxes generated from local citizens unless that local person stays in a hotel or rents a car. Keep in mind the CVB is only funded by those taxes gathered from the lodging and car rentals taking place only in Colorado Springs yet the CVB promotes three counties – El Paso, Teller and Fremont. The CVB is the marketing arm for Southern Colorado and the Pikes Peak Region and ARE the destination experts. For those tourism related businesses that are able to support their own marketing budget, the CVB supplements with appropriate, well thought out marketing strategies. For those tourism related businesses that do not have the budget to support a marketing plan, the CVB steps in and takes on that role. The CVB is needed more now than ever to assist those businesses that have suffered as a result of the devastating fires and floods. Bottom line, you live in a tourist destination and many, many jobs are hanging on the line as to whether the CVB can continue to offer much needed services to these tourist related businesses.

    Jackie
    December 2, 2013 at 1:03 pm

  13. I find the above comment about promoting for profit vs. non profit industry pretty short-sighted considering the fact that non-profits in this community account for a significant amount of economic activity. We have more non-profits per capita than any other city in the country.

    I see this move by the Council as “more of the same” in terms of short-sightedness and a lack of vision for the future. There’s more important things about living in a vibrant community than the change in your pocket. Look to other more successful cities and you’ll see they have a vision for economic vitality coupled with significant individual contribution in the form of taxation.

    Matt Payne
    December 2, 2013 at 3:05 pm

  14. Merlin, et al, I believe that Colorado Springs is exempt from state statute because it is a home rule city.

    Jimmie Bensberg
    December 2, 2013 at 4:11 pm

  15. If its really so important, make the case. Threats and strong arming make it seem as if the rich guy and his interests can’t make a reasoned case. Tourism jobs aren’t exactly a shinning achievement, as Orlando Florida can tell ya.

    Just so you all know, our nation(rich guys included) are about to under go a swing from wealth agglomeration by single individuals to community based social spending. It’s already happening, and its antithetical to the anti-tax crowd. I know because I’m doing some small part of the “agglomeration” as it were.

    Take care not to end up in the wrong side of history here CS…

    ThankGodWeLeft
    December 2, 2013 at 6:32 pm

  16. ThankGodWeLeft – if you’re so happy to have left our city why do you continue to catch up on all the news comment on local happenings. Define tourism jobs because it sounds as if you believe tourism jobs equates to minimum wage earnings only. Our community is home to many locally owned tourism related businesses as well as all levels of employment from front desk representatives, sales managers to general managers at the hotel/motels and these are just the tip of the iceberg. Some of the major hotels have a significant employee base.

    Callie
    December 3, 2013 at 9:42 am

  17. The city council has made a decision that is so short-sighted and will have a horrendous impact on our community. Lacking a strong lodging and tourism attraction support like the CVB will not only hurt the business owners of these industries, but the Colorado Springs citizens who rely on these places for their employment. Shame on the city council. They have no understanding of business nor tourism, yet have made a decision that will impact our entire city. I would strongly urge voters to consider recalls of all council members who voted to discontinue fully funding the CVB. Hotels have generated these funds and therefore should be at the helm of determining how they are used.

    Steve Rauch
    December 4, 2013 at 2:21 pm

  18. Let’s clear one thing up, the lodger and rental tax imposed on overnight stays at lodging properties and local rental car sales are NOT resident tax dollars. These dollars come from VISITORS spending their money in our community not from a general fund so please don’t be misled by arguments that your hard earned dollars are going somewhere you haven’t approved. If your dollars were going to a business that promote tourism to our area and bring full wallets that spend at restaurants, stores and popular stops, I’d say that’s money well spent.

    COS Native
    December 5, 2013 at 12:16 pm